Disappointment as introduction of new levy system delayed by Europe

British racing's hopes that the government's levy replacement system would be in place on Saturday will not be realised after the government revealed on Wednesday night that state aid approval from Europe would not be received in time.

The government had hoped the new system would be operational from April 1 but minister Lord Ashton of Hyde told the House of Lords that it had been informed by the European Commission "that state aid approval will not be received before April 1 and therefore the reformed levy will not be in place on this date".

He added: "However, we are confident that clearance will be received shortly."

The news means that the 56th levy scheme will come into force from Saturday until state aid approval is received and the new system can begin.

The Lords debate was the final stage of the parliamentary process required to enact the secondary legislation which will bring in the new system, if and when state aid approval is received.

The news from Europe will be a disappointment to racing which has come tantalisingly close to achieving its aim of closing the loophole which allows betting operators based offshore to avoid contributing financially to the sport through the levy.

However BHA director of corporate affairs Will Lambe said afterwards: "Today, British racing has moved a significant step closer to achieving a fair, enforceable and sustainable return from all betting activity on the sport. This has been the result of a sustained campaign for a number of years

"We appreciate enormously the support that parliamentarians across the political spectrum have provided to our unique and multi-billion pound industry. Parliament has made clear its will that the funding of British racing should be supported by legislation that reflects fully today’s digital economy.

“We now await the anticipated European Commission clearance, as the final formal step in the process and which will secure the new levy and have a transformative effect on our sport, in particular its grassroots and our tens of thousands of employees. We look forward to working with our partners in the betting industry and beyond to grow interest and participation in our sport."

The sport's leaders believe the new system should bring in between £30 million and £40 million extra per year.

The statutory instrument, entitled The Horserace Betting Levy Regulations 2017, received cross-party support, just as it did from MPs earlier in the week, and was approved.

However, not every peer supported the government's plans.

Lord Lipsey, who has been a long-term opponent of the levy, said he believed "with total confidence" the levy replacement system would be subject to legal challenge.

He concluded: "Far from providing certainty to racing, this order promises prolonged uncertainty.

"Long term there is every chance that this half-baked legislative scheme will collapse at the hands of the courts."